Priceline the next Google? That's not good.October 19, 2012: 11:59 AM ET
Now investors are trying to figure out what other Wall Street darlings could be ripe for a fall. Traders on StockTwits zeroed in on Priceline (PCLN). And shares of the online travel leader were down more than 4% Friday following a nearly 3% drop Thursday. Google's earnings miss may be one reason Priceline was pulling back.
Definitely. Priceline has a significant presence in Europe through its Booking.com unit. The stock has been whipsawed before on worries about a slowdown in Europe. Maybe William Shatner can do a commercial from Athens in his next TV spot as the (thankfully) resurrected Priceline Negotiator?
Other commentators on StockTwits noted that even though there may be nothing really fundamentally wrong with Priceline, it may simply be a victim of lofty expectations and too much enthusiasm -- just like Chipotle, Google and a host of other high-flying stocks.
Great points. Pricleine is trading at more than $560 a share. For many average investors, there is a bit of sticker shock even though the valuation of many of these companies are actually attractive based on earnings. Priceline, for example, trades at a relatively reasonable 15 times 2013 earnings forecasts. That's about the same multiple as rival Expedia (EXPE), which may appear cheaper because one share only costs $52.
Stock splits for Priceline as well as other triple-digit stocks like Chipotle, Google, Apple (AAPL), Panera (PNRA) and medical robot maker Intuitive Surgical (ISRG) could make these stocks psychologically more appealing to investors who may not want to spend $1000 to buy just 2 shares.
Still, other traders are worried that Priceline is destined to report earnings that miss forecasts as well.
Priceline has not yet said when it will be reporting its third-quarter earnings. But the company has typically announced them during the first week of November. So if the company misses forecasts, maybe investors will be too distracted by other news to notice? Rumor has it that there is an election or something that week.
Finally, it's time for my Reader Comment of the Week. The birth of @PendingLarry was a gift that kept on giving Thursday afternoon following Google's premature earnings release. But there were many other hilarious tweets as well. Here's my favorite.
Bonus points for using TJFI, a nod to my occasional "This just (fictitiously) in" tweets. I also love the fact that you included a reference to one of my favorite punching bags: #Bleakberry maker Research in Motion (RIMM). It's almost enough to make me overlook that hideous choice of a photo for your Twitter feed. New England Patriots head coach Bill Belichick is the only guy who looks worse than Facebook (FB) CEO Mark Zuckerberg in a hoodie!